Business Context and Reporting Period
This Form 8-K filing by American Express Company (AXP) was submitted on January 15, 2025, under Item 7.01 for Regulation FD Disclosure. The report provides preliminary delinquency and write-off statistics for the U.S. Consumer and U.S. Small Business Card Member lending portfolios for the months ended October 31, November 30, and December 31, 2024, as well as the three months ended December 31, 2024.
Key Financial Metrics
The filing focuses on credit performance metrics rather than revenue or profit. Key data points for the three months ended December 31, 2024, include:
- Total Card Member Loans: $122.2 billion (U.S. Consumer and U.S. Small Business combined).
- U.S. Consumer Portfolio: Total loans of $92.6 billion with a net write-off rate of 2.1% and a 30+ days past due rate of 1.4%.
- U.S. Small Business Portfolio: Total loans of $29.6 billion with a net write-off rate of 2.3% and a 30+ days past due rate of 1.5%.
- Lending Trust Performance: The American Express Credit Account Master Trust reported an ending principal balance of $26.9 billion and an annualized default rate of 1.2% for December 2024.
The filing does not provide data on revenue, operating profit, cash flow, margins, debt levels, or liquidity positions.
Material Changes and Reclassifications
Effective December 1, 2024, the Company reclassified $758 million of Card Member loans related to its Lowe's small business cobrand portfolio to "Card Member loans held for sale" on the Consolidated Balance Sheets. Consequently, these loans are excluded from the December 2024 statistics presented in the table, which reflect only loans held for investment.
Comparing the three-month period ended December 31, 2024, to the prior months:
- U.S. Consumer Net Write-off Rate: Increased to 2.1% in December from 2.0% in November, though it remained consistent with the 2.1% quarterly average.
- U.S. Small Business Net Write-off Rate: Increased to 2.4% in December from 2.3% in November and 2.2% in October.
- Delinquency Rates: Remained stable at 1.4% for U.S. Consumer and 1.5% for U.S. Small Business across all three months reported.
Outlook, Risks, and Contingencies
The filing notes that credit performance statistics may vary month-to-month due to factors such as the mix, vintage, and aging of loans, as well as calculation mechanics (e.g., end-of-period balances vs. average balances). Variability may also arise from the number of days in a month, holiday timing, seasonality, and third-party data timing.
The report explicitly states that the Card Member loans securitized through the Lending Trust do not possess identical characteristics to the total U.S. Consumer or U.S. Small Business portfolios, which include both securitized and non-securitized loans. Therefore, the Lending Trust's reported credit performance may differ from the broader portfolio statistics.
Investor Verification Checklist
- Verify the impact of the $758 million Lowe's cobrand portfolio reclassification on the December 2024 loan balances held for investment.
- Monitor the trend in U.S. Small Business net write-off rates, which rose sequentially from 2.2% in October to 2.4% in December.
- Compare the Lending Trust's annualized default rate (1.2%) against the broader portfolio net write-off rates to assess securitization performance differences.
- Review the subsequent Form 10-Q or 10-K for full financial statements, as this 8-K contains only credit statistics and no revenue or earnings data.